I must tell you here, I did a Google search (see screenshot to the left) on “employee lawsuit statistics" and the first two hits were from the Equal Employment Opportunity Commission (EEOC)—and they weren’t offering statistics but sticking a big knife in the back of the small business owner. Both hits from the EEOC went on and on about what company was sued and for how much.
Luckily, I did find a white paper from the Legal Landminers, 2009 Law Changes Could Impact Your Business, which did offer some scary statistics on the number of employee lawsuits.
According to authors Mary Gorski and Denise Tataryn, “Employee lawsuits have risen 400 percent in the last 20 years," and of those lawsuits 41.5 percent are “private employers with between 15 and 100 employees." Yes, the small business owner is hit again—only this time, those looking to buck the system do make a buck.
I’m sure some of you are naysayers. “Oh my employees are so happy! I live by Voice of the Employee Surveys. My employees would never sue me."
Well, good for you, but if you look out the window right now, you’ll see Munchkins and Dorothy and Toto because you are in the Land of Oz. In other words, you aren’t facing reality.
Don’t believe me? Here are some more facts.
A Los Angeles Times story in June 2011 recounts how a car wash employee was awarded $80,000 for employer violations and that didn’t include the employer’s legal fees.
More statistics from authors Gorski and Tataryn say, “If an employment lawsuit goes to trial, plaintiffs (employees) are more likely to win 67 percent of the time in state courts and 63 percent in federal courts."
In addition, “wrongful termination lawsuits have risen 260 percent" in the past 20 years and the average cost to settle an employee lawsuit for the small business owner in 2006 rose to $310,845. In 2001, the average cost stood at $130,476. That’s a whopping change folks.
Now you should be scared because the “I’ll sue this organization" threats are real. If you are a horrible employer and breaking employment laws, you deserve these lawsuits. On the other hand, if you are just a small time Joe trying to do your best, only to find yourself on the losing side of an employee lawsuit, what did you do wrong?